Some investors are locking in profits from yesterday’s rally while others are worried the US government’s credit rating will be downgraded after the Democrats and Republicans struck a deal which increased the debt ceiling until February.
In the summer of 2011, Standard & Poor’s stripped the US of its AAA credit rating after the government raised the debt limit. Fitch ratings agency has already warned the US about lowering its credit rating and this is sending stocks lower.
The good news is that the partial shutdown in the US over the budget has come to an end, although this issue will resurface in December.
In London, British Sky Broadcasting has risen 6% after announcing a 7% increase in three-month revenue to September. Fresnillo reported a 7.6% increase in silver production and the Mexican miner retained its full-year output guidance. The share price is up 1%.
We are expecting the Dow Jones to open 160 points lower at 15,213 as the fear of the US being downgraded grips traders.